How A Reverse Mortgage Loan Could Help Protect You And Your Home In Uncertain Times

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Can you protect something? Maybe your home?

Do you remember in 2008 what had happened before and after the housing market bubble? The market was going up, home values were increasing, and we had low unemployment rates before the bubble crashed.  Before the crash, when houses in larger cities went up for sale, a few hours later, it would have multiple offers over the asking price. Then shortly after the housing bubble crashed, home values had started to drop, and the time frame for selling homes became much longer.  After the bubble, the Home Affordable Refinance Program (HARP) became a popular loan option because a lot of people owed more on the mortgage than what they were worth from the home’s declining values.

Fast-forward to today, where you see more and more seniors continue to stay in their homes longer, and starter homes are getting harder and harder to find. Millennials are looking to buy starter homes, and the supply for entry-level homes is going down. Prices and demand for entry-level homes for the past few years have been significantly increasing.

Before Covid-19, the market was going up, Las Vegas home values were increasing, and we had low unemployment rates. According to thebalance.com, the unemployment rate for 2019 was at 3.5%, which the last time we had seen rates that low was since 1969 when Nixon took office and just before the mild 1969-1970 Recession. Do you believe history tends to repeat itself, and all ships rise or fall with the tide?  Are you concerned about your home values going down just like the stock market has decreased recently?

There is a lot of worry and fear being caused currently from the Covid-19 virus in the news lately. For some, the market’s recent downswing of 30% in their retirement funds is causing even more fear. We are all hoping this will be a fast rebound like the 1969-70 mild recession, like a rubber band pulled back, testing its limits, and shooting forward with a stronger force behind it. Hopefully, it will not take several years, like the 2008 housing bubble, took to recover. The question is, what can you do about it, so you’re not just sitting and hoping things change. If your 62 or older with some equity in your home, you may have the ability to use a reverse mortgage loan.

Here are some reasons why I believe a reverse mortgage loan is going to become a popular loan option like the HARP loan was after the 2008 bubble.

1. Are their better places to pull your money from besides your 401k accounts?

There have been many studies done that show it’s better for your portfolio’s survivability if you pull the money from a growing reverse mortgage line of credit in market downswings than from your investments.

Are you currently using your home equity to potentially strengthen your portfolio? Are you presently pulling money out of investments? Wouldn’t it be beneficial to have the funds come out of another source of funds rather than what you have in the stock market now*?  If not your home, where else are you going to get the funds to meet the cash flow you need? The interest rate on a reverse mortgage loan is pretty low right now. Wouldn’t you rather leverage your available assets than ignore them to prevent you from having to sell your investments?

2. Are you concerned about your home values going down?

A reverse mortgage loan is a non-recourse loan. The definition from Investopedia for Nonrecourse debt is a type of loan secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount.

So if you are concerned about home values going down as they did after the 2008 housing bubble a reverse mortgage loan would be a good loan to consider.  If your home value drops, the lender is not able to request their funds back that they already borrowed you.

3. What could the benefits of having additional cash flow be?

One of the first things said about reverse mortgage loans in most advertisements is no monthly mortgage payments except for taxes, insurance, and maintenance. In times of fear and concern tend to be the best time to have additional cash flow.   The best time to help people is highest when there is a need when people are struggling. You can use the additional cash flow to help your loved ones who may be struggling with recently becoming unemployed and struggling to keep up with life essentials as buying food. If home prices, the market, and other items continue to lower in price, you can use the additional cash flow to purchase things at discounted prices. Whatever the reason is, I’ve never heard anybody complain about having additional cash flow.

It’s often wise to take the time to learn something new, and it doesn’t pay to wait.  Rick R. Rodriguez is your local Certified Reverse Mortgage Professional, CRMP®, who has been specializing in reverse mortgages since 2005 and has first-hand experience with how reverse mortgages helped homeowners back in 2008 to help you navigate through our current conditions.  Whether you are looking in Las Vegas for a reverse mortgage or beyond, contact our team for more information.

 

Rick R. Rodriguez

Rick R. Rodriguez

Rick R. Rodriguez has been in mortgage sales and management since 2003 and has held positions as loan originator, sales manager, production manager, and branch manager. He is well-versed in all types of mortgage products, and over his career, he has been recognized as an accomplished and trusted professional.

In 2004, after completing his first reverse mortgage transaction, Rick took the steps to focus primarily on this kind of loans and become a specialist in the industry. In February 2016, he became the first person in Southern Nevada and the 117th in the nation to obtain the designation of Certified Reverse Mortgage Professional (CRMP®).

As a CRMP®, Rick has extensive experience in all available reverse mortgage products, including the Home Equity Conversion Mortgage (HECM) refinance, HECM to HECM refinance, HECM for purchase and jumbo reverse mortgage. His clients benefit from his financial qualifications, meticulousness, effective communication skills, and years of experience working with reverse mortgages. He has the proven ability to explain the reverse mortgage to help others understand the process.

Pushed by his passion for reverse mortgages and his commitment to the industry, Rick spends his time working with homeowners, realtors, healthcare professionals, and various other individuals and organizations to lay out the role reverse mortgages have in real estate and retirement planning.

“A reverse mortgage should be, at the very least, considered by every homeowner over the age of 62. The flexibility that this program offers can be life-changing as well as an effective counterpart to retirement planning. I always welcome the opportunity to speak with clients about a reverse mortgage, and to help them determine if it may be the right option to meet their financial and housing needs.”

Rick is a Las Vegas native, and he holds a BSBA in Accounting from the University of Nevada Las Vegas. After graduating college, he worked for a local Certified Public Accounting firm before moving into the mortgage industry. He enjoys spending time with his loved ones, traveling, exploring the outdoors, playing various sports, and above all helping his wife raise their family.

Jesse Brewer

Jesse A. Brewer

Jesse A. Brewer (NMLS# 473359) is a veteran professional in the industry with extensive background in reverse mortgage origination, sales management, and production center management. He currently specializes in reverse mortgage origination at Resolute Bank working directly with homeowners, real estate professionals, financial specialists and healthcare providers to inform them of this type of loan’s flexibility and practical applications—helping homeowners improve their retirement economic outlook.

Jesse began his career in 2001 with a mid-sized Boston-area bank, before moving to Las Vegas in 2006 to focus on mortgage origination. In 2008, he joined a local reverse mortgage lender, where he became, in two years, the top-producing reverse mortgage loan officer.

Jesse then moved into sales management, a role which he held for several years, before becoming vice president, national sales manager, and reverse mortgage division head running Proficio Mortgage Ventures, LLC, based in Henderson, NV. As division head, Jesse used his innate leadership and team-building expertise to propel a small sales team into a national production center in the bank’s reverse mortgage division.

Jesse is dedicated to making the industry approachable by being an active speaker, educator, and relationship builder within the banking and mortgage community. Clients compliment his ability to simplify the reverse mortgage process with solutions that lead to life-changing outcomes.

“The reverse mortgage is a powerful financial tool that should be evaluated by anyone considering retirement options. I always look forward to helping clients understand the flexibility of the program and how it can be utilized to provide for a more comfortable standard of living through retirement.”

Jesse holds a degree in Business Administration Management from Massachusetts Fitchburg State University. He enjoys sports and outdoor activities with his wife, Virginia. He played football at FSC followed by playing rugby for over a decade, that included winning a National Championship in 2010.

 

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